Deborah Nightingale - 1 copy 2002 Massachusetts Institute of Technology

Examples of Commonality in Lifecycle Operations

bull Commercial Airline ndash Main engine starter is common across 747-400 767 and 767-300ER ndash 26 airports service these aircraft (11 common) ndash Airline only has to stock 14 spares as opposed to 25 if they were not common bull PMA-276 ndash UH-1Y and AH-1Z deploy together on the same MEU relyingon the same mobility maintenance training and sustainmentinfrastructure ndash 85 commonality between UH-1Y (utility) and AH-1Z (attack)reduces the detachment maintenance personnel requirementfrom between 4 and 14 people (3 to 12) ndash Nearly $15 billion in savings from commonality over 20 year lifecycle of program

Deborah Nightingale - 2 copy 2002 Massachusetts Institute of Technology

Timeline of Commonality Benefits Illustrates Linkage to Multi-Stakeholder Enterprises

Designreuse

Shared development cost

Reduced rework

Reduced tooling

Reduced cycle time

Higher productivity

Reduced spares inventory

Higher spares availability

Reduced complexity in supply

Greater interoperability

Higher reliability

Reduced downtime

Fewer maintenance hours

Lower risk

Reduced time for source selection

Faster solutions to problems

Reduced testing

Process reuse

Economies of scale

Reduced inventory

Reduced training equipment

Reduced support equipment

Reduce training time

Reduced documentation

Increased operator competency

Reduced DMS

Deborah Nightingale - 3 copy 2002 Massachusetts Institute of Technology

System Integrator-Supplier Communications Involve Interactions at Different Levels

General Management

Program Manager

It Dept

Engineering

Requirements

Procurement

SYSTEM INTEGRATOR

Strategicbusiness relationships

Capabilities

Source selection requirements order placement

IT Solutions training amp Implementation plans amp technical requirements

Coordinated methods procedures amp solutions

-Common technical databases amp tools-Integrated product teams (IPTs)-Technical data exchange-Flowdown of key characteristics-Configuration control-Engineering change process management

Source Adapted from William R Neill ldquoDesign Chain Engineering Implementing Integrated Supply Chain ProductDevelopment ldquoPresentation at an MIT Workshop(06241999)

General Management

Customer Liaison Manager

It Dept

Engineering

Deborah Nightingale - 4 copy 2002 Massachusetts Institute of Technology

Early Supplier Integration Results in Significant Benefits through Architectural Innovation

ARCHITECTURAL INNOVATIONMajor modification of how components in a systemproduct are linked together bull Significant improvement in systemproduct architecture through changes in formstructurefunctional interfaces or system configuration bull Knowledge integration over the supplier network (value stream perspective prime-key suppliers- subtiers tapping supplier technology base)

ldquoOld Approach ldquoCurrentrdquoLean

ldquoEmergingrdquoLean

Rigid verticalFFF interfaces

And control

Prime

Key Suppliers

Subtiers

Prime

Subtiers

Key Suppliers

Collaborative with rigidorganizational

interfaces

Prime

Subtiers

Key Suppliers

Virtual Teamwo boundaries

Armrsquos length interfaces totally defined and controlled

Collaborative but constrained by priorworksharearrangements

Collaborative and seamlessly I integrated architectural innovation

Deborah Nightingale - 5 copy 2002 Massachusetts Institute of Technology

Observations on Architectural Integration Approaches

bull Senior leadership plays a pivotal role by enabling lifecycle analysis and integration of multiple enterprise perspectives 1048599

bull Much of the challenge may be organizational rather than technical 1048599

bull Portfolio strategies and processes are necessary to obtain full benefits 1048599

bull Metrics and incentives that measure and reward lifecycle value creation a key enabler 1048599

bull Customer enterprise structure and demand determine applicability of this approach

Deborah Nightingale - 6 copy 2002 Massachusetts Institute of Technology

Influence Standards when Key Stakeholders Lie outside Direct Hierarchical Control

bull Standards allow decentralize collective action across enterprise boundaries

bull With limited control over stakeholders and product design emphasis shifts to ldquocontrol pointsrdquo in product architecture

bull Standards foster innovation in the supply base by enabling modular decoupled designs

bull Standards are often a strategic battleground-high-stakes winner-take-all contests encourage some enterprises to push proprietary standards at the expense of a broader spectrum of stakeholders

bull Several models of collaborative forums exist that successfully develop open standards

Deborah Nightingale - 7 copy 2002 Massachusetts Institute of Technology

Common Large Area Display Illustrates the Value Delivered through the Creation and Use of Standards

bull 500 displays for AWACs - But 15000 displays for DoD

bull Standardized on commercial display for all of DoD - 60 less weight

- 90 less maintenance cost

- 11 fold increase in MTBF

- 30 power reduction

- Better resolution

bull Up to $100M in DoD savings

Deborah Nightingale - 8 copy 2002 Massachusetts Institute of Technology

Observations on Using Standards to Achieve Enterprise Integration

bull Important to establish neutral forum of broker to define standards that prevent bias towards one solution

bull Use open architecture where possiblebull Consider technology clockspeed look to industries or

sectors that more closely match that of the system in question

bull Establish a common syntax to facilitate knowledge sharing

Deborah Nightingale - 9 copy 2002 Massachusetts Institute of Technology

Information Technology is Vital to Enterprise Integration Lean

bull Virtual Enterprise System (VES) provides the backbone for the digital design and manufacturing environment

bull All product data available real-time worldwide

bull Enables collaborative development

Customers Other Partners amp Suppliers

Lockheed Martin Ft Worth TX BAES

Samlesbury UK

Northrop Grumman

EI Segundo CA

NGC Database ldquomirrorrdquo

Master Database BAES Database ldquomirrorrdquo

Adapted from Burbage T Lockheed Martin ldquoJSF-A Winning Environmentrdquo Presentation at MIT March 6 2002

Deborah Nightingale - 10 copy 2002 Massachusetts Institute of Technology

Enterprise Process Architecture

Process

standardization is a key enterprise strategy

Life Cycle Processesmiddot Business Acquisition and Program Managementmiddot Requirements Definitionmiddot ProductProcess Developmentmiddot Supply Chain Managementmiddot Productionmiddot Distribution and Support

Enabling Infrastructure Processesmiddot Financemiddot Information Technologymiddot Human Resourcesmiddot Quality Assurancemiddot Facilities and Servicesmiddot Environment Health and Safety

Enterprise Leadership Processesmiddot Strategic Planningmiddot Business Modelsmiddot Managing Business Growthmiddot Strategic Partneringmiddot Organizational Structure and Integrationmiddot Transformation Management

Deborah Nightingale - 11 copy 2002 Massachusetts Institute of Technology

Integrated Systems Operating Concept

Market-Focused IPTs

Shared Services

Common Systems

Lean Shop Floor amp Above

Optimized Assets amp Technology Deployment

Leadership Culture

Airborne GroundSurveil amp BattleMgmt Systems

Airborne EarlyWarning amp ElectWarfare Systems

Air CombatSystems

HumanResources amp

Admin

TransactionAccountingInformation

Services

Sector HQStaff

Functions

HumanResources

Procurement

Payroll

Finance

Define ValueMap Value

Stream

EstablishFlow

ImplementPull

Strive forPerfection

RationalizedAssets

SharedCenters ofExcellence

DistributedProduct-Specific

Capabilities

JointSynergyPrograms

ShareholderValue

Education

IncentivizedMgmt Perf

WeightedFinancial

Goals

MeasuringUnderpiningST amp LT

Actions

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

Source Cool C Northrop Grumman ldquoJourney to a Lean Enterpriserdquo Presentation at MIT Oct 31 2001

Deborah Nightingale - 12 copy 2002 Massachusetts Institute of Technology

Simple Financial Metrics can Misrepresent theValue of Enterprise ldquoInfrastructurerdquo Investments

bull Research found that a military customer valued systems engineering analyses enough to pay for them in a military program but corporate would not in a comparable commercial program

bull Spacecraft testing research also showed commercial programs more likely to have infrastructure-related failures 1048599

bull Financial results-based decisions may inhibit capabilities development that pays dividends in the long-term

Deborah Nightingale - 13 copy 2002 Massachusetts Institute of Technology

Parallels In Building Products and Enterprises

CUSTOMER REQUIRES Capability Affordability Responsiveness

PRODUCT ENTERPRISE

bull Efficiency bull Fitness

BALANCE

bull Performance

bull ldquoIlitiesrdquo

Multiple Products Services Different Life Cycle Phases

bullProcesses bullToolsTools bullSkillsSkills bullEtcEtc

PRODUCT DEFINITION F-22 Definition Data Package

PRODUCT F-22 Tail 5005

ENTERPRISE LM Aero ndash the Company

ENTERPRISE DEFINITION Enterprise Architecture

DESIGN METHODOLOGY Systems Engineering

DESIGN METHODOLOGY ldquoEnterprise Engineeringrdquo

ACHIEVING MULTIPLE REQUIREMENTS

TAKES BOTH Soure Kessler LockheedMartin 2001

• Slide 1
• Slide 2
• Slide 3
• Slide 4
• Slide 5
• Slide 6
• Slide 7
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• Slide 12
• Slide 13

Deborah Nightingale - 2 copy 2002 Massachusetts Institute of Technology

Timeline of Commonality Benefits Illustrates Linkage to Multi-Stakeholder Enterprises

Designreuse

Shared development cost

Reduced rework

Reduced tooling

Reduced cycle time

Higher productivity

Reduced spares inventory

Higher spares availability

Reduced complexity in supply

Greater interoperability

Higher reliability

Reduced downtime

Fewer maintenance hours

Lower risk

Reduced time for source selection

Faster solutions to problems

Reduced testing

Process reuse

Economies of scale

Reduced inventory

Reduced training equipment

Reduced support equipment

Reduce training time

Reduced documentation

Increased operator competency

Reduced DMS

Deborah Nightingale - 3 copy 2002 Massachusetts Institute of Technology

System Integrator-Supplier Communications Involve Interactions at Different Levels

General Management

Program Manager

It Dept

Engineering

Requirements

Procurement

SYSTEM INTEGRATOR

Strategicbusiness relationships

Capabilities

Source selection requirements order placement

IT Solutions training amp Implementation plans amp technical requirements

Coordinated methods procedures amp solutions

-Common technical databases amp tools-Integrated product teams (IPTs)-Technical data exchange-Flowdown of key characteristics-Configuration control-Engineering change process management

Source Adapted from William R Neill ldquoDesign Chain Engineering Implementing Integrated Supply Chain ProductDevelopment ldquoPresentation at an MIT Workshop(06241999)

General Management

Customer Liaison Manager

It Dept

Engineering

Deborah Nightingale - 4 copy 2002 Massachusetts Institute of Technology

Early Supplier Integration Results in Significant Benefits through Architectural Innovation

ARCHITECTURAL INNOVATIONMajor modification of how components in a systemproduct are linked together bull Significant improvement in systemproduct architecture through changes in formstructurefunctional interfaces or system configuration bull Knowledge integration over the supplier network (value stream perspective prime-key suppliers- subtiers tapping supplier technology base)

ldquoOld Approach ldquoCurrentrdquoLean

ldquoEmergingrdquoLean

Rigid verticalFFF interfaces

And control

Prime

Key Suppliers

Subtiers

Prime

Subtiers

Key Suppliers

Collaborative with rigidorganizational

interfaces

Prime

Subtiers

Key Suppliers

Virtual Teamwo boundaries

Armrsquos length interfaces totally defined and controlled

Collaborative but constrained by priorworksharearrangements

Collaborative and seamlessly I integrated architectural innovation

Deborah Nightingale - 5 copy 2002 Massachusetts Institute of Technology

Observations on Architectural Integration Approaches

bull Senior leadership plays a pivotal role by enabling lifecycle analysis and integration of multiple enterprise perspectives 1048599

bull Much of the challenge may be organizational rather than technical 1048599

bull Portfolio strategies and processes are necessary to obtain full benefits 1048599

bull Metrics and incentives that measure and reward lifecycle value creation a key enabler 1048599

bull Customer enterprise structure and demand determine applicability of this approach

Deborah Nightingale - 6 copy 2002 Massachusetts Institute of Technology

Influence Standards when Key Stakeholders Lie outside Direct Hierarchical Control

bull Standards allow decentralize collective action across enterprise boundaries

bull With limited control over stakeholders and product design emphasis shifts to ldquocontrol pointsrdquo in product architecture

bull Standards foster innovation in the supply base by enabling modular decoupled designs

bull Standards are often a strategic battleground-high-stakes winner-take-all contests encourage some enterprises to push proprietary standards at the expense of a broader spectrum of stakeholders

bull Several models of collaborative forums exist that successfully develop open standards

Deborah Nightingale - 7 copy 2002 Massachusetts Institute of Technology

Common Large Area Display Illustrates the Value Delivered through the Creation and Use of Standards

bull 500 displays for AWACs - But 15000 displays for DoD

bull Standardized on commercial display for all of DoD - 60 less weight

- 90 less maintenance cost

- 11 fold increase in MTBF

- 30 power reduction

- Better resolution

bull Up to $100M in DoD savings

Deborah Nightingale - 8 copy 2002 Massachusetts Institute of Technology

Observations on Using Standards to Achieve Enterprise Integration

bull Important to establish neutral forum of broker to define standards that prevent bias towards one solution

bull Use open architecture where possiblebull Consider technology clockspeed look to industries or

sectors that more closely match that of the system in question

bull Establish a common syntax to facilitate knowledge sharing

Deborah Nightingale - 9 copy 2002 Massachusetts Institute of Technology

Information Technology is Vital to Enterprise Integration Lean

bull Virtual Enterprise System (VES) provides the backbone for the digital design and manufacturing environment

bull All product data available real-time worldwide

bull Enables collaborative development

Customers Other Partners amp Suppliers

Lockheed Martin Ft Worth TX BAES

Samlesbury UK

Northrop Grumman

EI Segundo CA

NGC Database ldquomirrorrdquo

Master Database BAES Database ldquomirrorrdquo

Adapted from Burbage T Lockheed Martin ldquoJSF-A Winning Environmentrdquo Presentation at MIT March 6 2002

Deborah Nightingale - 10 copy 2002 Massachusetts Institute of Technology

Enterprise Process Architecture

Process

standardization is a key enterprise strategy

Life Cycle Processesmiddot Business Acquisition and Program Managementmiddot Requirements Definitionmiddot ProductProcess Developmentmiddot Supply Chain Managementmiddot Productionmiddot Distribution and Support

Enabling Infrastructure Processesmiddot Financemiddot Information Technologymiddot Human Resourcesmiddot Quality Assurancemiddot Facilities and Servicesmiddot Environment Health and Safety

Enterprise Leadership Processesmiddot Strategic Planningmiddot Business Modelsmiddot Managing Business Growthmiddot Strategic Partneringmiddot Organizational Structure and Integrationmiddot Transformation Management

Deborah Nightingale - 11 copy 2002 Massachusetts Institute of Technology

Integrated Systems Operating Concept

Market-Focused IPTs

Shared Services

Common Systems

Lean Shop Floor amp Above

Optimized Assets amp Technology Deployment

Leadership Culture

Airborne GroundSurveil amp BattleMgmt Systems

Airborne EarlyWarning amp ElectWarfare Systems

Air CombatSystems

HumanResources amp

Admin

TransactionAccountingInformation

Services

Sector HQStaff

Functions

HumanResources

Procurement

Payroll

Finance

Define ValueMap Value

Stream

EstablishFlow

ImplementPull

Strive forPerfection

RationalizedAssets

SharedCenters ofExcellence

DistributedProduct-Specific

Capabilities

JointSynergyPrograms

ShareholderValue

Education

IncentivizedMgmt Perf

WeightedFinancial

Goals

MeasuringUnderpiningST amp LT

Actions

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

Source Cool C Northrop Grumman ldquoJourney to a Lean Enterpriserdquo Presentation at MIT Oct 31 2001

Deborah Nightingale - 12 copy 2002 Massachusetts Institute of Technology

Simple Financial Metrics can Misrepresent theValue of Enterprise ldquoInfrastructurerdquo Investments

bull Research found that a military customer valued systems engineering analyses enough to pay for them in a military program but corporate would not in a comparable commercial program

bull Spacecraft testing research also showed commercial programs more likely to have infrastructure-related failures 1048599

bull Financial results-based decisions may inhibit capabilities development that pays dividends in the long-term

Deborah Nightingale - 13 copy 2002 Massachusetts Institute of Technology

Parallels In Building Products and Enterprises

CUSTOMER REQUIRES Capability Affordability Responsiveness

PRODUCT ENTERPRISE

bull Efficiency bull Fitness

BALANCE

bull Performance

bull ldquoIlitiesrdquo

Multiple Products Services Different Life Cycle Phases

bullProcesses bullToolsTools bullSkillsSkills bullEtcEtc

PRODUCT DEFINITION F-22 Definition Data Package

PRODUCT F-22 Tail 5005

ENTERPRISE LM Aero ndash the Company

ENTERPRISE DEFINITION Enterprise Architecture

DESIGN METHODOLOGY Systems Engineering

DESIGN METHODOLOGY ldquoEnterprise Engineeringrdquo

ACHIEVING MULTIPLE REQUIREMENTS

TAKES BOTH Soure Kessler LockheedMartin 2001

• Slide 1
• Slide 2
• Slide 3
• Slide 4
• Slide 5
• Slide 6
• Slide 7
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• Slide 12
• Slide 13

Deborah Nightingale - 3 copy 2002 Massachusetts Institute of Technology

System Integrator-Supplier Communications Involve Interactions at Different Levels

General Management

Program Manager

It Dept

Engineering

Requirements

Procurement

SYSTEM INTEGRATOR

Strategicbusiness relationships

Capabilities

Source selection requirements order placement

IT Solutions training amp Implementation plans amp technical requirements

Coordinated methods procedures amp solutions

-Common technical databases amp tools-Integrated product teams (IPTs)-Technical data exchange-Flowdown of key characteristics-Configuration control-Engineering change process management

Source Adapted from William R Neill ldquoDesign Chain Engineering Implementing Integrated Supply Chain ProductDevelopment ldquoPresentation at an MIT Workshop(06241999)

General Management

Customer Liaison Manager

It Dept

Engineering

Deborah Nightingale - 4 copy 2002 Massachusetts Institute of Technology

Early Supplier Integration Results in Significant Benefits through Architectural Innovation

ARCHITECTURAL INNOVATIONMajor modification of how components in a systemproduct are linked together bull Significant improvement in systemproduct architecture through changes in formstructurefunctional interfaces or system configuration bull Knowledge integration over the supplier network (value stream perspective prime-key suppliers- subtiers tapping supplier technology base)

ldquoOld Approach ldquoCurrentrdquoLean

ldquoEmergingrdquoLean

Rigid verticalFFF interfaces

And control

Prime

Key Suppliers

Subtiers

Prime

Subtiers

Key Suppliers

Collaborative with rigidorganizational

interfaces

Prime

Subtiers

Key Suppliers

Virtual Teamwo boundaries

Armrsquos length interfaces totally defined and controlled

Collaborative but constrained by priorworksharearrangements

Collaborative and seamlessly I integrated architectural innovation

Deborah Nightingale - 5 copy 2002 Massachusetts Institute of Technology

Observations on Architectural Integration Approaches

bull Senior leadership plays a pivotal role by enabling lifecycle analysis and integration of multiple enterprise perspectives 1048599

bull Much of the challenge may be organizational rather than technical 1048599

bull Portfolio strategies and processes are necessary to obtain full benefits 1048599

bull Metrics and incentives that measure and reward lifecycle value creation a key enabler 1048599

bull Customer enterprise structure and demand determine applicability of this approach

Deborah Nightingale - 6 copy 2002 Massachusetts Institute of Technology

Influence Standards when Key Stakeholders Lie outside Direct Hierarchical Control

bull Standards allow decentralize collective action across enterprise boundaries

bull With limited control over stakeholders and product design emphasis shifts to ldquocontrol pointsrdquo in product architecture

bull Standards foster innovation in the supply base by enabling modular decoupled designs

bull Standards are often a strategic battleground-high-stakes winner-take-all contests encourage some enterprises to push proprietary standards at the expense of a broader spectrum of stakeholders

bull Several models of collaborative forums exist that successfully develop open standards

Deborah Nightingale - 7 copy 2002 Massachusetts Institute of Technology

Common Large Area Display Illustrates the Value Delivered through the Creation and Use of Standards

bull 500 displays for AWACs - But 15000 displays for DoD

bull Standardized on commercial display for all of DoD - 60 less weight

- 90 less maintenance cost

- 11 fold increase in MTBF

- 30 power reduction

- Better resolution

bull Up to $100M in DoD savings

Deborah Nightingale - 8 copy 2002 Massachusetts Institute of Technology

Observations on Using Standards to Achieve Enterprise Integration

bull Important to establish neutral forum of broker to define standards that prevent bias towards one solution

bull Use open architecture where possiblebull Consider technology clockspeed look to industries or

sectors that more closely match that of the system in question

bull Establish a common syntax to facilitate knowledge sharing

Deborah Nightingale - 9 copy 2002 Massachusetts Institute of Technology

Information Technology is Vital to Enterprise Integration Lean

bull Virtual Enterprise System (VES) provides the backbone for the digital design and manufacturing environment

bull All product data available real-time worldwide

bull Enables collaborative development

Customers Other Partners amp Suppliers

Lockheed Martin Ft Worth TX BAES

Samlesbury UK

Northrop Grumman

EI Segundo CA

NGC Database ldquomirrorrdquo

Master Database BAES Database ldquomirrorrdquo

Adapted from Burbage T Lockheed Martin ldquoJSF-A Winning Environmentrdquo Presentation at MIT March 6 2002

Deborah Nightingale - 10 copy 2002 Massachusetts Institute of Technology

Enterprise Process Architecture

Process

standardization is a key enterprise strategy

Life Cycle Processesmiddot Business Acquisition and Program Managementmiddot Requirements Definitionmiddot ProductProcess Developmentmiddot Supply Chain Managementmiddot Productionmiddot Distribution and Support

Enabling Infrastructure Processesmiddot Financemiddot Information Technologymiddot Human Resourcesmiddot Quality Assurancemiddot Facilities and Servicesmiddot Environment Health and Safety

Enterprise Leadership Processesmiddot Strategic Planningmiddot Business Modelsmiddot Managing Business Growthmiddot Strategic Partneringmiddot Organizational Structure and Integrationmiddot Transformation Management

Deborah Nightingale - 11 copy 2002 Massachusetts Institute of Technology

Integrated Systems Operating Concept

Market-Focused IPTs

Shared Services

Common Systems

Lean Shop Floor amp Above

Optimized Assets amp Technology Deployment

Leadership Culture

Airborne GroundSurveil amp BattleMgmt Systems

Airborne EarlyWarning amp ElectWarfare Systems

Air CombatSystems

HumanResources amp

Admin

TransactionAccountingInformation

Services

Sector HQStaff

Functions

HumanResources

Procurement

Payroll

Finance

Define ValueMap Value

Stream

EstablishFlow

ImplementPull

Strive forPerfection

RationalizedAssets

SharedCenters ofExcellence

DistributedProduct-Specific

Capabilities

JointSynergyPrograms

ShareholderValue

Education

IncentivizedMgmt Perf

WeightedFinancial

Goals

MeasuringUnderpiningST amp LT

Actions

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

Source Cool C Northrop Grumman ldquoJourney to a Lean Enterpriserdquo Presentation at MIT Oct 31 2001

Deborah Nightingale - 12 copy 2002 Massachusetts Institute of Technology

Simple Financial Metrics can Misrepresent theValue of Enterprise ldquoInfrastructurerdquo Investments

bull Research found that a military customer valued systems engineering analyses enough to pay for them in a military program but corporate would not in a comparable commercial program

bull Spacecraft testing research also showed commercial programs more likely to have infrastructure-related failures 1048599

bull Financial results-based decisions may inhibit capabilities development that pays dividends in the long-term

Deborah Nightingale - 13 copy 2002 Massachusetts Institute of Technology

Parallels In Building Products and Enterprises

CUSTOMER REQUIRES Capability Affordability Responsiveness

PRODUCT ENTERPRISE

bull Efficiency bull Fitness

BALANCE

bull Performance

bull ldquoIlitiesrdquo

Multiple Products Services Different Life Cycle Phases

bullProcesses bullToolsTools bullSkillsSkills bullEtcEtc

PRODUCT DEFINITION F-22 Definition Data Package

PRODUCT F-22 Tail 5005

ENTERPRISE LM Aero ndash the Company

ENTERPRISE DEFINITION Enterprise Architecture

DESIGN METHODOLOGY Systems Engineering

DESIGN METHODOLOGY ldquoEnterprise Engineeringrdquo

ACHIEVING MULTIPLE REQUIREMENTS

TAKES BOTH Soure Kessler LockheedMartin 2001

• Slide 1
• Slide 2
• Slide 3
• Slide 4
• Slide 5
• Slide 6
• Slide 7
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• Slide 12
• Slide 13

Deborah Nightingale - 4 copy 2002 Massachusetts Institute of Technology

Early Supplier Integration Results in Significant Benefits through Architectural Innovation

ARCHITECTURAL INNOVATIONMajor modification of how components in a systemproduct are linked together bull Significant improvement in systemproduct architecture through changes in formstructurefunctional interfaces or system configuration bull Knowledge integration over the supplier network (value stream perspective prime-key suppliers- subtiers tapping supplier technology base)

ldquoOld Approach ldquoCurrentrdquoLean

ldquoEmergingrdquoLean

Rigid verticalFFF interfaces

And control

Prime

Key Suppliers

Subtiers

Prime

Subtiers

Key Suppliers

Collaborative with rigidorganizational

interfaces

Prime

Subtiers

Key Suppliers

Virtual Teamwo boundaries

Armrsquos length interfaces totally defined and controlled

Collaborative but constrained by priorworksharearrangements

Collaborative and seamlessly I integrated architectural innovation

Deborah Nightingale - 5 copy 2002 Massachusetts Institute of Technology

Observations on Architectural Integration Approaches

bull Senior leadership plays a pivotal role by enabling lifecycle analysis and integration of multiple enterprise perspectives 1048599

bull Much of the challenge may be organizational rather than technical 1048599

bull Portfolio strategies and processes are necessary to obtain full benefits 1048599

bull Metrics and incentives that measure and reward lifecycle value creation a key enabler 1048599

bull Customer enterprise structure and demand determine applicability of this approach

Deborah Nightingale - 6 copy 2002 Massachusetts Institute of Technology

Influence Standards when Key Stakeholders Lie outside Direct Hierarchical Control

bull Standards allow decentralize collective action across enterprise boundaries

bull With limited control over stakeholders and product design emphasis shifts to ldquocontrol pointsrdquo in product architecture

bull Standards foster innovation in the supply base by enabling modular decoupled designs

bull Standards are often a strategic battleground-high-stakes winner-take-all contests encourage some enterprises to push proprietary standards at the expense of a broader spectrum of stakeholders

bull Several models of collaborative forums exist that successfully develop open standards

Deborah Nightingale - 7 copy 2002 Massachusetts Institute of Technology

Common Large Area Display Illustrates the Value Delivered through the Creation and Use of Standards

bull 500 displays for AWACs - But 15000 displays for DoD

bull Standardized on commercial display for all of DoD - 60 less weight

- 90 less maintenance cost

- 11 fold increase in MTBF

- 30 power reduction

- Better resolution

bull Up to $100M in DoD savings

Deborah Nightingale - 8 copy 2002 Massachusetts Institute of Technology

Observations on Using Standards to Achieve Enterprise Integration

bull Important to establish neutral forum of broker to define standards that prevent bias towards one solution

bull Use open architecture where possiblebull Consider technology clockspeed look to industries or

sectors that more closely match that of the system in question

bull Establish a common syntax to facilitate knowledge sharing

Deborah Nightingale - 9 copy 2002 Massachusetts Institute of Technology

Information Technology is Vital to Enterprise Integration Lean

bull Virtual Enterprise System (VES) provides the backbone for the digital design and manufacturing environment

bull All product data available real-time worldwide

bull Enables collaborative development

Customers Other Partners amp Suppliers

Lockheed Martin Ft Worth TX BAES

Samlesbury UK

Northrop Grumman

EI Segundo CA

NGC Database ldquomirrorrdquo

Master Database BAES Database ldquomirrorrdquo

Adapted from Burbage T Lockheed Martin ldquoJSF-A Winning Environmentrdquo Presentation at MIT March 6 2002

Deborah Nightingale - 10 copy 2002 Massachusetts Institute of Technology

Enterprise Process Architecture

Process

standardization is a key enterprise strategy

Life Cycle Processesmiddot Business Acquisition and Program Managementmiddot Requirements Definitionmiddot ProductProcess Developmentmiddot Supply Chain Managementmiddot Productionmiddot Distribution and Support

Enabling Infrastructure Processesmiddot Financemiddot Information Technologymiddot Human Resourcesmiddot Quality Assurancemiddot Facilities and Servicesmiddot Environment Health and Safety

Enterprise Leadership Processesmiddot Strategic Planningmiddot Business Modelsmiddot Managing Business Growthmiddot Strategic Partneringmiddot Organizational Structure and Integrationmiddot Transformation Management

Deborah Nightingale - 11 copy 2002 Massachusetts Institute of Technology

Integrated Systems Operating Concept

Market-Focused IPTs

Shared Services

Common Systems

Lean Shop Floor amp Above

Optimized Assets amp Technology Deployment

Leadership Culture

Airborne GroundSurveil amp BattleMgmt Systems

Airborne EarlyWarning amp ElectWarfare Systems

Air CombatSystems

HumanResources amp

Admin

TransactionAccountingInformation

Services

Sector HQStaff

Functions

HumanResources

Procurement

Payroll

Finance

Define ValueMap Value

Stream

EstablishFlow

ImplementPull

Strive forPerfection

RationalizedAssets

SharedCenters ofExcellence

DistributedProduct-Specific

Capabilities

JointSynergyPrograms

ShareholderValue

Education

IncentivizedMgmt Perf

WeightedFinancial

Goals

MeasuringUnderpiningST amp LT

Actions

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

Source Cool C Northrop Grumman ldquoJourney to a Lean Enterpriserdquo Presentation at MIT Oct 31 2001

Deborah Nightingale - 12 copy 2002 Massachusetts Institute of Technology

Simple Financial Metrics can Misrepresent theValue of Enterprise ldquoInfrastructurerdquo Investments

bull Research found that a military customer valued systems engineering analyses enough to pay for them in a military program but corporate would not in a comparable commercial program

bull Spacecraft testing research also showed commercial programs more likely to have infrastructure-related failures 1048599

bull Financial results-based decisions may inhibit capabilities development that pays dividends in the long-term

Deborah Nightingale - 13 copy 2002 Massachusetts Institute of Technology

Parallels In Building Products and Enterprises

CUSTOMER REQUIRES Capability Affordability Responsiveness

PRODUCT ENTERPRISE

bull Efficiency bull Fitness

BALANCE

bull Performance

bull ldquoIlitiesrdquo

Multiple Products Services Different Life Cycle Phases

bullProcesses bullToolsTools bullSkillsSkills bullEtcEtc

PRODUCT DEFINITION F-22 Definition Data Package

PRODUCT F-22 Tail 5005

ENTERPRISE LM Aero ndash the Company

ENTERPRISE DEFINITION Enterprise Architecture

DESIGN METHODOLOGY Systems Engineering

DESIGN METHODOLOGY ldquoEnterprise Engineeringrdquo

ACHIEVING MULTIPLE REQUIREMENTS

TAKES BOTH Soure Kessler LockheedMartin 2001

• Slide 1
• Slide 2
• Slide 3
• Slide 4
• Slide 5
• Slide 6
• Slide 7
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• Slide 12
• Slide 13

Deborah Nightingale - 5 copy 2002 Massachusetts Institute of Technology

Observations on Architectural Integration Approaches

bull Senior leadership plays a pivotal role by enabling lifecycle analysis and integration of multiple enterprise perspectives 1048599

bull Much of the challenge may be organizational rather than technical 1048599

bull Portfolio strategies and processes are necessary to obtain full benefits 1048599

bull Metrics and incentives that measure and reward lifecycle value creation a key enabler 1048599

bull Customer enterprise structure and demand determine applicability of this approach

Deborah Nightingale - 6 copy 2002 Massachusetts Institute of Technology

Influence Standards when Key Stakeholders Lie outside Direct Hierarchical Control

bull Standards allow decentralize collective action across enterprise boundaries

bull With limited control over stakeholders and product design emphasis shifts to ldquocontrol pointsrdquo in product architecture

bull Standards foster innovation in the supply base by enabling modular decoupled designs

bull Standards are often a strategic battleground-high-stakes winner-take-all contests encourage some enterprises to push proprietary standards at the expense of a broader spectrum of stakeholders

bull Several models of collaborative forums exist that successfully develop open standards

Deborah Nightingale - 7 copy 2002 Massachusetts Institute of Technology

Common Large Area Display Illustrates the Value Delivered through the Creation and Use of Standards

bull 500 displays for AWACs - But 15000 displays for DoD

bull Standardized on commercial display for all of DoD - 60 less weight

- 90 less maintenance cost

- 11 fold increase in MTBF

- 30 power reduction

- Better resolution

bull Up to $100M in DoD savings

Deborah Nightingale - 8 copy 2002 Massachusetts Institute of Technology

Observations on Using Standards to Achieve Enterprise Integration

bull Important to establish neutral forum of broker to define standards that prevent bias towards one solution

bull Use open architecture where possiblebull Consider technology clockspeed look to industries or

sectors that more closely match that of the system in question

bull Establish a common syntax to facilitate knowledge sharing

Deborah Nightingale - 9 copy 2002 Massachusetts Institute of Technology

Information Technology is Vital to Enterprise Integration Lean

bull Virtual Enterprise System (VES) provides the backbone for the digital design and manufacturing environment

bull All product data available real-time worldwide

bull Enables collaborative development

Customers Other Partners amp Suppliers

Lockheed Martin Ft Worth TX BAES

Samlesbury UK

Northrop Grumman

EI Segundo CA

NGC Database ldquomirrorrdquo

Master Database BAES Database ldquomirrorrdquo

Adapted from Burbage T Lockheed Martin ldquoJSF-A Winning Environmentrdquo Presentation at MIT March 6 2002

Deborah Nightingale - 10 copy 2002 Massachusetts Institute of Technology

Enterprise Process Architecture

Process

standardization is a key enterprise strategy

Life Cycle Processesmiddot Business Acquisition and Program Managementmiddot Requirements Definitionmiddot ProductProcess Developmentmiddot Supply Chain Managementmiddot Productionmiddot Distribution and Support

Enabling Infrastructure Processesmiddot Financemiddot Information Technologymiddot Human Resourcesmiddot Quality Assurancemiddot Facilities and Servicesmiddot Environment Health and Safety

Enterprise Leadership Processesmiddot Strategic Planningmiddot Business Modelsmiddot Managing Business Growthmiddot Strategic Partneringmiddot Organizational Structure and Integrationmiddot Transformation Management

Deborah Nightingale - 11 copy 2002 Massachusetts Institute of Technology

Integrated Systems Operating Concept

Market-Focused IPTs

Shared Services

Common Systems

Lean Shop Floor amp Above

Optimized Assets amp Technology Deployment

Leadership Culture

Airborne GroundSurveil amp BattleMgmt Systems

Airborne EarlyWarning amp ElectWarfare Systems

Air CombatSystems

HumanResources amp

Admin

TransactionAccountingInformation

Services

Sector HQStaff

Functions

HumanResources

Procurement

Payroll

Finance

Define ValueMap Value

Stream

EstablishFlow

ImplementPull

Strive forPerfection

RationalizedAssets

SharedCenters ofExcellence

DistributedProduct-Specific

Capabilities

JointSynergyPrograms

ShareholderValue

Education

IncentivizedMgmt Perf

WeightedFinancial

Goals

MeasuringUnderpiningST amp LT

Actions

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

Source Cool C Northrop Grumman ldquoJourney to a Lean Enterpriserdquo Presentation at MIT Oct 31 2001

Deborah Nightingale - 12 copy 2002 Massachusetts Institute of Technology

Simple Financial Metrics can Misrepresent theValue of Enterprise ldquoInfrastructurerdquo Investments

bull Research found that a military customer valued systems engineering analyses enough to pay for them in a military program but corporate would not in a comparable commercial program

bull Spacecraft testing research also showed commercial programs more likely to have infrastructure-related failures 1048599

bull Financial results-based decisions may inhibit capabilities development that pays dividends in the long-term

Deborah Nightingale - 13 copy 2002 Massachusetts Institute of Technology

Parallels In Building Products and Enterprises

CUSTOMER REQUIRES Capability Affordability Responsiveness

PRODUCT ENTERPRISE

bull Efficiency bull Fitness

BALANCE

bull Performance

bull ldquoIlitiesrdquo

Multiple Products Services Different Life Cycle Phases

bullProcesses bullToolsTools bullSkillsSkills bullEtcEtc

PRODUCT DEFINITION F-22 Definition Data Package

PRODUCT F-22 Tail 5005

ENTERPRISE LM Aero ndash the Company

ENTERPRISE DEFINITION Enterprise Architecture

DESIGN METHODOLOGY Systems Engineering

DESIGN METHODOLOGY ldquoEnterprise Engineeringrdquo

ACHIEVING MULTIPLE REQUIREMENTS

TAKES BOTH Soure Kessler LockheedMartin 2001

• Slide 1
• Slide 2
• Slide 3
• Slide 4
• Slide 5
• Slide 6
• Slide 7
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• Slide 12
• Slide 13

Deborah Nightingale - 6 copy 2002 Massachusetts Institute of Technology

Influence Standards when Key Stakeholders Lie outside Direct Hierarchical Control

bull Standards allow decentralize collective action across enterprise boundaries

bull With limited control over stakeholders and product design emphasis shifts to ldquocontrol pointsrdquo in product architecture

bull Standards foster innovation in the supply base by enabling modular decoupled designs

bull Standards are often a strategic battleground-high-stakes winner-take-all contests encourage some enterprises to push proprietary standards at the expense of a broader spectrum of stakeholders

bull Several models of collaborative forums exist that successfully develop open standards

Deborah Nightingale - 7 copy 2002 Massachusetts Institute of Technology

Common Large Area Display Illustrates the Value Delivered through the Creation and Use of Standards

bull 500 displays for AWACs - But 15000 displays for DoD

bull Standardized on commercial display for all of DoD - 60 less weight

- 90 less maintenance cost

- 11 fold increase in MTBF

- 30 power reduction

- Better resolution

bull Up to $100M in DoD savings

Deborah Nightingale - 8 copy 2002 Massachusetts Institute of Technology

Observations on Using Standards to Achieve Enterprise Integration

bull Important to establish neutral forum of broker to define standards that prevent bias towards one solution

bull Use open architecture where possiblebull Consider technology clockspeed look to industries or

sectors that more closely match that of the system in question

bull Establish a common syntax to facilitate knowledge sharing

Deborah Nightingale - 9 copy 2002 Massachusetts Institute of Technology

Information Technology is Vital to Enterprise Integration Lean

bull Virtual Enterprise System (VES) provides the backbone for the digital design and manufacturing environment

bull All product data available real-time worldwide

bull Enables collaborative development

Customers Other Partners amp Suppliers

Lockheed Martin Ft Worth TX BAES

Samlesbury UK

Northrop Grumman

EI Segundo CA

NGC Database ldquomirrorrdquo

Master Database BAES Database ldquomirrorrdquo

Adapted from Burbage T Lockheed Martin ldquoJSF-A Winning Environmentrdquo Presentation at MIT March 6 2002

Deborah Nightingale - 10 copy 2002 Massachusetts Institute of Technology

Enterprise Process Architecture

Process

standardization is a key enterprise strategy

Life Cycle Processesmiddot Business Acquisition and Program Managementmiddot Requirements Definitionmiddot ProductProcess Developmentmiddot Supply Chain Managementmiddot Productionmiddot Distribution and Support

Enabling Infrastructure Processesmiddot Financemiddot Information Technologymiddot Human Resourcesmiddot Quality Assurancemiddot Facilities and Servicesmiddot Environment Health and Safety

Enterprise Leadership Processesmiddot Strategic Planningmiddot Business Modelsmiddot Managing Business Growthmiddot Strategic Partneringmiddot Organizational Structure and Integrationmiddot Transformation Management

Deborah Nightingale - 11 copy 2002 Massachusetts Institute of Technology

Integrated Systems Operating Concept

Market-Focused IPTs

Shared Services

Common Systems

Lean Shop Floor amp Above

Optimized Assets amp Technology Deployment

Leadership Culture

Airborne GroundSurveil amp BattleMgmt Systems

Airborne EarlyWarning amp ElectWarfare Systems

Air CombatSystems

HumanResources amp

Admin

TransactionAccountingInformation

Services

Sector HQStaff

Functions

HumanResources

Procurement

Payroll

Finance

Define ValueMap Value

Stream

EstablishFlow

ImplementPull

Strive forPerfection

RationalizedAssets

SharedCenters ofExcellence

DistributedProduct-Specific

Capabilities

JointSynergyPrograms

ShareholderValue

Education

IncentivizedMgmt Perf

WeightedFinancial

Goals

MeasuringUnderpiningST amp LT

Actions

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

Source Cool C Northrop Grumman ldquoJourney to a Lean Enterpriserdquo Presentation at MIT Oct 31 2001

Deborah Nightingale - 12 copy 2002 Massachusetts Institute of Technology

Simple Financial Metrics can Misrepresent theValue of Enterprise ldquoInfrastructurerdquo Investments

bull Research found that a military customer valued systems engineering analyses enough to pay for them in a military program but corporate would not in a comparable commercial program

bull Spacecraft testing research also showed commercial programs more likely to have infrastructure-related failures 1048599

bull Financial results-based decisions may inhibit capabilities development that pays dividends in the long-term

Deborah Nightingale - 13 copy 2002 Massachusetts Institute of Technology

Parallels In Building Products and Enterprises

CUSTOMER REQUIRES Capability Affordability Responsiveness

PRODUCT ENTERPRISE

bull Efficiency bull Fitness

BALANCE

bull Performance

bull ldquoIlitiesrdquo

Multiple Products Services Different Life Cycle Phases

bullProcesses bullToolsTools bullSkillsSkills bullEtcEtc

PRODUCT DEFINITION F-22 Definition Data Package

PRODUCT F-22 Tail 5005

ENTERPRISE LM Aero ndash the Company

ENTERPRISE DEFINITION Enterprise Architecture

DESIGN METHODOLOGY Systems Engineering

DESIGN METHODOLOGY ldquoEnterprise Engineeringrdquo

ACHIEVING MULTIPLE REQUIREMENTS

TAKES BOTH Soure Kessler LockheedMartin 2001

• Slide 1
• Slide 2
• Slide 3
• Slide 4
• Slide 5
• Slide 6
• Slide 7
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• Slide 12
• Slide 13

Deborah Nightingale - 7 copy 2002 Massachusetts Institute of Technology

Common Large Area Display Illustrates the Value Delivered through the Creation and Use of Standards

bull 500 displays for AWACs - But 15000 displays for DoD

bull Standardized on commercial display for all of DoD - 60 less weight

- 90 less maintenance cost

- 11 fold increase in MTBF

- 30 power reduction

- Better resolution

bull Up to $100M in DoD savings

Deborah Nightingale - 8 copy 2002 Massachusetts Institute of Technology

Observations on Using Standards to Achieve Enterprise Integration

bull Important to establish neutral forum of broker to define standards that prevent bias towards one solution

bull Use open architecture where possiblebull Consider technology clockspeed look to industries or

sectors that more closely match that of the system in question

bull Establish a common syntax to facilitate knowledge sharing

Deborah Nightingale - 9 copy 2002 Massachusetts Institute of Technology

Information Technology is Vital to Enterprise Integration Lean

bull Virtual Enterprise System (VES) provides the backbone for the digital design and manufacturing environment

bull All product data available real-time worldwide

bull Enables collaborative development

Customers Other Partners amp Suppliers

Lockheed Martin Ft Worth TX BAES

Samlesbury UK

Northrop Grumman

EI Segundo CA

NGC Database ldquomirrorrdquo

Master Database BAES Database ldquomirrorrdquo

Adapted from Burbage T Lockheed Martin ldquoJSF-A Winning Environmentrdquo Presentation at MIT March 6 2002

Deborah Nightingale - 10 copy 2002 Massachusetts Institute of Technology

Enterprise Process Architecture

Process

standardization is a key enterprise strategy

Life Cycle Processesmiddot Business Acquisition and Program Managementmiddot Requirements Definitionmiddot ProductProcess Developmentmiddot Supply Chain Managementmiddot Productionmiddot Distribution and Support

Enabling Infrastructure Processesmiddot Financemiddot Information Technologymiddot Human Resourcesmiddot Quality Assurancemiddot Facilities and Servicesmiddot Environment Health and Safety

Enterprise Leadership Processesmiddot Strategic Planningmiddot Business Modelsmiddot Managing Business Growthmiddot Strategic Partneringmiddot Organizational Structure and Integrationmiddot Transformation Management

Deborah Nightingale - 11 copy 2002 Massachusetts Institute of Technology

Integrated Systems Operating Concept

Market-Focused IPTs

Shared Services

Common Systems

Lean Shop Floor amp Above

Optimized Assets amp Technology Deployment

Leadership Culture

Airborne GroundSurveil amp BattleMgmt Systems

Airborne EarlyWarning amp ElectWarfare Systems

Air CombatSystems

HumanResources amp

Admin

TransactionAccountingInformation

Services

Sector HQStaff

Functions

HumanResources

Procurement

Payroll

Finance

Define ValueMap Value

Stream

EstablishFlow

ImplementPull

Strive forPerfection

RationalizedAssets

SharedCenters ofExcellence

DistributedProduct-Specific

Capabilities

JointSynergyPrograms

ShareholderValue

Education

IncentivizedMgmt Perf

WeightedFinancial

Goals

MeasuringUnderpiningST amp LT

Actions

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

Source Cool C Northrop Grumman ldquoJourney to a Lean Enterpriserdquo Presentation at MIT Oct 31 2001

Deborah Nightingale - 12 copy 2002 Massachusetts Institute of Technology

Simple Financial Metrics can Misrepresent theValue of Enterprise ldquoInfrastructurerdquo Investments

bull Research found that a military customer valued systems engineering analyses enough to pay for them in a military program but corporate would not in a comparable commercial program

bull Spacecraft testing research also showed commercial programs more likely to have infrastructure-related failures 1048599

bull Financial results-based decisions may inhibit capabilities development that pays dividends in the long-term

Deborah Nightingale - 13 copy 2002 Massachusetts Institute of Technology

Parallels In Building Products and Enterprises

CUSTOMER REQUIRES Capability Affordability Responsiveness

PRODUCT ENTERPRISE

bull Efficiency bull Fitness

BALANCE

bull Performance

bull ldquoIlitiesrdquo

Multiple Products Services Different Life Cycle Phases

bullProcesses bullToolsTools bullSkillsSkills bullEtcEtc

PRODUCT DEFINITION F-22 Definition Data Package

PRODUCT F-22 Tail 5005

ENTERPRISE LM Aero ndash the Company

ENTERPRISE DEFINITION Enterprise Architecture

DESIGN METHODOLOGY Systems Engineering

DESIGN METHODOLOGY ldquoEnterprise Engineeringrdquo

ACHIEVING MULTIPLE REQUIREMENTS

TAKES BOTH Soure Kessler LockheedMartin 2001

• Slide 1
• Slide 2
• Slide 3
• Slide 4
• Slide 5
• Slide 6
• Slide 7
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• Slide 12
• Slide 13

Deborah Nightingale - 8 copy 2002 Massachusetts Institute of Technology

Observations on Using Standards to Achieve Enterprise Integration

bull Important to establish neutral forum of broker to define standards that prevent bias towards one solution

bull Use open architecture where possiblebull Consider technology clockspeed look to industries or

sectors that more closely match that of the system in question

bull Establish a common syntax to facilitate knowledge sharing

Deborah Nightingale - 9 copy 2002 Massachusetts Institute of Technology

Information Technology is Vital to Enterprise Integration Lean

bull Virtual Enterprise System (VES) provides the backbone for the digital design and manufacturing environment

bull All product data available real-time worldwide

bull Enables collaborative development

Customers Other Partners amp Suppliers

Lockheed Martin Ft Worth TX BAES

Samlesbury UK

Northrop Grumman

EI Segundo CA

NGC Database ldquomirrorrdquo

Master Database BAES Database ldquomirrorrdquo

Adapted from Burbage T Lockheed Martin ldquoJSF-A Winning Environmentrdquo Presentation at MIT March 6 2002

Deborah Nightingale - 10 copy 2002 Massachusetts Institute of Technology

Enterprise Process Architecture

Process

standardization is a key enterprise strategy

Life Cycle Processesmiddot Business Acquisition and Program Managementmiddot Requirements Definitionmiddot ProductProcess Developmentmiddot Supply Chain Managementmiddot Productionmiddot Distribution and Support

Enabling Infrastructure Processesmiddot Financemiddot Information Technologymiddot Human Resourcesmiddot Quality Assurancemiddot Facilities and Servicesmiddot Environment Health and Safety

Enterprise Leadership Processesmiddot Strategic Planningmiddot Business Modelsmiddot Managing Business Growthmiddot Strategic Partneringmiddot Organizational Structure and Integrationmiddot Transformation Management

Deborah Nightingale - 11 copy 2002 Massachusetts Institute of Technology

Integrated Systems Operating Concept

Market-Focused IPTs

Shared Services

Common Systems

Lean Shop Floor amp Above

Optimized Assets amp Technology Deployment

Leadership Culture

Airborne GroundSurveil amp BattleMgmt Systems

Airborne EarlyWarning amp ElectWarfare Systems

Air CombatSystems

HumanResources amp

Admin

TransactionAccountingInformation

Services

Sector HQStaff

Functions

HumanResources

Procurement

Payroll

Finance

Define ValueMap Value

Stream

EstablishFlow

ImplementPull

Strive forPerfection

RationalizedAssets

SharedCenters ofExcellence

DistributedProduct-Specific

Capabilities

JointSynergyPrograms

ShareholderValue

Education

IncentivizedMgmt Perf

WeightedFinancial

Goals

MeasuringUnderpiningST amp LT

Actions

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

Source Cool C Northrop Grumman ldquoJourney to a Lean Enterpriserdquo Presentation at MIT Oct 31 2001

Deborah Nightingale - 12 copy 2002 Massachusetts Institute of Technology

Simple Financial Metrics can Misrepresent theValue of Enterprise ldquoInfrastructurerdquo Investments

bull Research found that a military customer valued systems engineering analyses enough to pay for them in a military program but corporate would not in a comparable commercial program

bull Spacecraft testing research also showed commercial programs more likely to have infrastructure-related failures 1048599

bull Financial results-based decisions may inhibit capabilities development that pays dividends in the long-term

Deborah Nightingale - 13 copy 2002 Massachusetts Institute of Technology

Parallels In Building Products and Enterprises

CUSTOMER REQUIRES Capability Affordability Responsiveness

PRODUCT ENTERPRISE

bull Efficiency bull Fitness

BALANCE

bull Performance

bull ldquoIlitiesrdquo

Multiple Products Services Different Life Cycle Phases

bullProcesses bullToolsTools bullSkillsSkills bullEtcEtc

PRODUCT DEFINITION F-22 Definition Data Package

PRODUCT F-22 Tail 5005

ENTERPRISE LM Aero ndash the Company

ENTERPRISE DEFINITION Enterprise Architecture

DESIGN METHODOLOGY Systems Engineering

DESIGN METHODOLOGY ldquoEnterprise Engineeringrdquo

ACHIEVING MULTIPLE REQUIREMENTS

TAKES BOTH Soure Kessler LockheedMartin 2001

• Slide 1
• Slide 2
• Slide 3
• Slide 4
• Slide 5
• Slide 6
• Slide 7
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• Slide 12
• Slide 13

Deborah Nightingale - 9 copy 2002 Massachusetts Institute of Technology

Information Technology is Vital to Enterprise Integration Lean

bull Virtual Enterprise System (VES) provides the backbone for the digital design and manufacturing environment

bull All product data available real-time worldwide

bull Enables collaborative development

Customers Other Partners amp Suppliers

Lockheed Martin Ft Worth TX BAES

Samlesbury UK

Northrop Grumman

EI Segundo CA

NGC Database ldquomirrorrdquo

Master Database BAES Database ldquomirrorrdquo

Adapted from Burbage T Lockheed Martin ldquoJSF-A Winning Environmentrdquo Presentation at MIT March 6 2002

Deborah Nightingale - 10 copy 2002 Massachusetts Institute of Technology

Enterprise Process Architecture

Process

standardization is a key enterprise strategy

Life Cycle Processesmiddot Business Acquisition and Program Managementmiddot Requirements Definitionmiddot ProductProcess Developmentmiddot Supply Chain Managementmiddot Productionmiddot Distribution and Support

Enabling Infrastructure Processesmiddot Financemiddot Information Technologymiddot Human Resourcesmiddot Quality Assurancemiddot Facilities and Servicesmiddot Environment Health and Safety

Enterprise Leadership Processesmiddot Strategic Planningmiddot Business Modelsmiddot Managing Business Growthmiddot Strategic Partneringmiddot Organizational Structure and Integrationmiddot Transformation Management

Deborah Nightingale - 11 copy 2002 Massachusetts Institute of Technology

Integrated Systems Operating Concept

Market-Focused IPTs

Shared Services

Common Systems

Lean Shop Floor amp Above

Optimized Assets amp Technology Deployment

Leadership Culture

Airborne GroundSurveil amp BattleMgmt Systems

Airborne EarlyWarning amp ElectWarfare Systems

Air CombatSystems

HumanResources amp

Admin

TransactionAccountingInformation

Services

Sector HQStaff

Functions

HumanResources

Procurement

Payroll

Finance

Define ValueMap Value

Stream

EstablishFlow

ImplementPull

Strive forPerfection

RationalizedAssets

SharedCenters ofExcellence

DistributedProduct-Specific

Capabilities

JointSynergyPrograms

ShareholderValue

Education

IncentivizedMgmt Perf

WeightedFinancial

Goals

MeasuringUnderpiningST amp LT

Actions

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

Source Cool C Northrop Grumman ldquoJourney to a Lean Enterpriserdquo Presentation at MIT Oct 31 2001

Deborah Nightingale - 12 copy 2002 Massachusetts Institute of Technology

Simple Financial Metrics can Misrepresent theValue of Enterprise ldquoInfrastructurerdquo Investments

bull Research found that a military customer valued systems engineering analyses enough to pay for them in a military program but corporate would not in a comparable commercial program

bull Spacecraft testing research also showed commercial programs more likely to have infrastructure-related failures 1048599

bull Financial results-based decisions may inhibit capabilities development that pays dividends in the long-term

Deborah Nightingale - 13 copy 2002 Massachusetts Institute of Technology

Parallels In Building Products and Enterprises

CUSTOMER REQUIRES Capability Affordability Responsiveness

PRODUCT ENTERPRISE

bull Efficiency bull Fitness

BALANCE

bull Performance

bull ldquoIlitiesrdquo

Multiple Products Services Different Life Cycle Phases

bullProcesses bullToolsTools bullSkillsSkills bullEtcEtc

PRODUCT DEFINITION F-22 Definition Data Package

PRODUCT F-22 Tail 5005

ENTERPRISE LM Aero ndash the Company

ENTERPRISE DEFINITION Enterprise Architecture

DESIGN METHODOLOGY Systems Engineering

DESIGN METHODOLOGY ldquoEnterprise Engineeringrdquo

ACHIEVING MULTIPLE REQUIREMENTS

TAKES BOTH Soure Kessler LockheedMartin 2001

• Slide 1
• Slide 2
• Slide 3
• Slide 4
• Slide 5
• Slide 6
• Slide 7
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• Slide 12
• Slide 13

Deborah Nightingale - 10 copy 2002 Massachusetts Institute of Technology

Enterprise Process Architecture

Process

standardization is a key enterprise strategy

Life Cycle Processesmiddot Business Acquisition and Program Managementmiddot Requirements Definitionmiddot ProductProcess Developmentmiddot Supply Chain Managementmiddot Productionmiddot Distribution and Support

Enabling Infrastructure Processesmiddot Financemiddot Information Technologymiddot Human Resourcesmiddot Quality Assurancemiddot Facilities and Servicesmiddot Environment Health and Safety

Enterprise Leadership Processesmiddot Strategic Planningmiddot Business Modelsmiddot Managing Business Growthmiddot Strategic Partneringmiddot Organizational Structure and Integrationmiddot Transformation Management

Deborah Nightingale - 11 copy 2002 Massachusetts Institute of Technology

Integrated Systems Operating Concept

Market-Focused IPTs

Shared Services

Common Systems

Lean Shop Floor amp Above

Optimized Assets amp Technology Deployment

Leadership Culture

Airborne GroundSurveil amp BattleMgmt Systems

Airborne EarlyWarning amp ElectWarfare Systems

Air CombatSystems

HumanResources amp

Admin

TransactionAccountingInformation

Services

Sector HQStaff

Functions

HumanResources

Procurement

Payroll

Finance

Define ValueMap Value

Stream

EstablishFlow

ImplementPull

Strive forPerfection

RationalizedAssets

SharedCenters ofExcellence

DistributedProduct-Specific

Capabilities

JointSynergyPrograms

ShareholderValue

Education

IncentivizedMgmt Perf

WeightedFinancial

Goals

MeasuringUnderpiningST amp LT

Actions

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

Source Cool C Northrop Grumman ldquoJourney to a Lean Enterpriserdquo Presentation at MIT Oct 31 2001

Deborah Nightingale - 12 copy 2002 Massachusetts Institute of Technology

Simple Financial Metrics can Misrepresent theValue of Enterprise ldquoInfrastructurerdquo Investments

bull Research found that a military customer valued systems engineering analyses enough to pay for them in a military program but corporate would not in a comparable commercial program

bull Spacecraft testing research also showed commercial programs more likely to have infrastructure-related failures 1048599

bull Financial results-based decisions may inhibit capabilities development that pays dividends in the long-term

Deborah Nightingale - 13 copy 2002 Massachusetts Institute of Technology

Parallels In Building Products and Enterprises

CUSTOMER REQUIRES Capability Affordability Responsiveness

PRODUCT ENTERPRISE

bull Efficiency bull Fitness

BALANCE

bull Performance

bull ldquoIlitiesrdquo

Multiple Products Services Different Life Cycle Phases

bullProcesses bullToolsTools bullSkillsSkills bullEtcEtc

PRODUCT DEFINITION F-22 Definition Data Package

PRODUCT F-22 Tail 5005

ENTERPRISE LM Aero ndash the Company

ENTERPRISE DEFINITION Enterprise Architecture

DESIGN METHODOLOGY Systems Engineering

DESIGN METHODOLOGY ldquoEnterprise Engineeringrdquo

ACHIEVING MULTIPLE REQUIREMENTS

TAKES BOTH Soure Kessler LockheedMartin 2001

• Slide 1
• Slide 2
• Slide 3
• Slide 4
• Slide 5
• Slide 6
• Slide 7
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• Slide 12
• Slide 13

Deborah Nightingale - 11 copy 2002 Massachusetts Institute of Technology

Integrated Systems Operating Concept

Market-Focused IPTs

Shared Services

Common Systems

Lean Shop Floor amp Above

Optimized Assets amp Technology Deployment

Leadership Culture

Airborne GroundSurveil amp BattleMgmt Systems

Airborne EarlyWarning amp ElectWarfare Systems

Air CombatSystems

HumanResources amp

Admin

TransactionAccountingInformation

Services

Sector HQStaff

Functions

HumanResources

Procurement

Payroll

Finance

Define ValueMap Value

Stream

EstablishFlow

ImplementPull

Strive forPerfection

RationalizedAssets

SharedCenters ofExcellence

DistributedProduct-Specific

Capabilities

JointSynergyPrograms

ShareholderValue

Education

IncentivizedMgmt Perf

WeightedFinancial

Goals

MeasuringUnderpiningST amp LT

Actions

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

A Fully Integrated Enterprise With a Shared InfrastructureProviding Distinct Competitive Advantages

Source Cool C Northrop Grumman ldquoJourney to a Lean Enterpriserdquo Presentation at MIT Oct 31 2001

Deborah Nightingale - 12 copy 2002 Massachusetts Institute of Technology

Simple Financial Metrics can Misrepresent theValue of Enterprise ldquoInfrastructurerdquo Investments

bull Research found that a military customer valued systems engineering analyses enough to pay for them in a military program but corporate would not in a comparable commercial program

bull Spacecraft testing research also showed commercial programs more likely to have infrastructure-related failures 1048599

bull Financial results-based decisions may inhibit capabilities development that pays dividends in the long-term

Deborah Nightingale - 13 copy 2002 Massachusetts Institute of Technology

Parallels In Building Products and Enterprises

CUSTOMER REQUIRES Capability Affordability Responsiveness

PRODUCT ENTERPRISE

bull Efficiency bull Fitness

BALANCE

bull Performance

bull ldquoIlitiesrdquo

Multiple Products Services Different Life Cycle Phases

bullProcesses bullToolsTools bullSkillsSkills bullEtcEtc

PRODUCT DEFINITION F-22 Definition Data Package

PRODUCT F-22 Tail 5005

ENTERPRISE LM Aero ndash the Company

ENTERPRISE DEFINITION Enterprise Architecture

DESIGN METHODOLOGY Systems Engineering

DESIGN METHODOLOGY ldquoEnterprise Engineeringrdquo

ACHIEVING MULTIPLE REQUIREMENTS

TAKES BOTH Soure Kessler LockheedMartin 2001

• Slide 1
• Slide 2
• Slide 3
• Slide 4
• Slide 5
• Slide 6
• Slide 7
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• Slide 12
• Slide 13

Deborah Nightingale - 12 copy 2002 Massachusetts Institute of Technology

Simple Financial Metrics can Misrepresent theValue of Enterprise ldquoInfrastructurerdquo Investments

bull Research found that a military customer valued systems engineering analyses enough to pay for them in a military program but corporate would not in a comparable commercial program

bull Spacecraft testing research also showed commercial programs more likely to have infrastructure-related failures 1048599

bull Financial results-based decisions may inhibit capabilities development that pays dividends in the long-term

Deborah Nightingale - 13 copy 2002 Massachusetts Institute of Technology

Parallels In Building Products and Enterprises

CUSTOMER REQUIRES Capability Affordability Responsiveness

PRODUCT ENTERPRISE

bull Efficiency bull Fitness

BALANCE

bull Performance

bull ldquoIlitiesrdquo

Multiple Products Services Different Life Cycle Phases

bullProcesses bullToolsTools bullSkillsSkills bullEtcEtc

PRODUCT DEFINITION F-22 Definition Data Package

PRODUCT F-22 Tail 5005

ENTERPRISE LM Aero ndash the Company

ENTERPRISE DEFINITION Enterprise Architecture

DESIGN METHODOLOGY Systems Engineering

DESIGN METHODOLOGY ldquoEnterprise Engineeringrdquo

ACHIEVING MULTIPLE REQUIREMENTS

TAKES BOTH Soure Kessler LockheedMartin 2001

• Slide 1
• Slide 2
• Slide 3
• Slide 4
• Slide 5
• Slide 6
• Slide 7
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• Slide 12
• Slide 13

Deborah Nightingale - 13 copy 2002 Massachusetts Institute of Technology

Parallels In Building Products and Enterprises

CUSTOMER REQUIRES Capability Affordability Responsiveness

PRODUCT ENTERPRISE

bull Efficiency bull Fitness

BALANCE

bull Performance

bull ldquoIlitiesrdquo

Multiple Products Services Different Life Cycle Phases

bullProcesses bullToolsTools bullSkillsSkills bullEtcEtc

PRODUCT DEFINITION F-22 Definition Data Package

PRODUCT F-22 Tail 5005

ENTERPRISE LM Aero ndash the Company

ENTERPRISE DEFINITION Enterprise Architecture

DESIGN METHODOLOGY Systems Engineering

DESIGN METHODOLOGY ldquoEnterprise Engineeringrdquo

ACHIEVING MULTIPLE REQUIREMENTS

TAKES BOTH Soure Kessler LockheedMartin 2001

• Slide 1
• Slide 2
• Slide 3
• Slide 4
• Slide 5
• Slide 6
• Slide 7
• Slide 8
• Slide 9
• Slide 10
• Slide 11
• Slide 12
• Slide 13